Positive Electric Enterprises

National Labor Relations Board - Board Decisions

Sep 30, 2008

353 N.L.R.B. 283 (N.L.R.B. 2008)

POSITIVE ELECTRIC ENTERPRISES
353 NLRB No. 27
283
Positive Electrical Enterprises, Inc. and its alter egos
CNY Electrical Maintenance Corp. and CNY
Electrical Service Group, Inc. d/b/a Positive
Electric and International Brotherhood of Elec-
trical Workers, Local 43. Case 3–CA–25037
September 30, 2008
SUPPLEMENTAL DECISION AND
ORDER REMANDING
BY CHAIRMAN SCHAUMBER AND MEMBER LIEBMAN
The General Counsel seeks a default judgment in this
case on the ground that the Respondents have failed to
file an answer to the compliance specification. For the
reasons that follow, we grant the motion in part and deny
it in part.
On September 23, 2005, the Board issued a Decision
and Order1 that, among other things, ordered Respondent
Positive Electrical Enterprises, Inc. (Positive) to comply
with the terms and conditions of two collective-
bargaining agreements and make whole bargaining unit
employees and benefit funds for losses resulting from
Positive’s violation of Section 8(a)(5) and (1) of the Act.
On October 27, 2006, Positive entered into a stipulation
whereby it agreed to apply the terms of the collective-
bargaining agreements and pay a compromised amount
of backpay to its unit employees. Positive agreed that if
it defaulted upon the terms of the stipulation, the Re-
gional Director could issue a compliance specification
alleging that Positive owed the full amount of backpay,
less any payments previously made.
A controversy having arisen over whether Positive de-
faulted upon the terms of the stipulation by failing to
apply the terms of the collective-bargaining agreements,
on April 30, 2008,2 the Regional Director issued a com-
pliance specification and notice of hearing.3 The specifi-
cation asserts that Respondents CNY Electrical Mainte-
nance Corp. (Maintenance) and CNY Electrical Service
Group, Inc. d/b/a Positive Electric (Service) are alter
egos of Positive and thus, jointly and severally liable for
remedying Positive’s unfair labor practices, including the
payment of backpay, interest, and other relief required by
the Board’s Order.4 The specification sets forth backpay
calculations for 19 discriminatees, alleges amounts due

1 345 NLRB 915.
2 All subsequent dates are in 2008.
3 The specification states that Respondent Positive has paid the com-
promised backpay amount of $11,000.
4 The specification names Anthony and Sandra Cirrincione as the of-
ficers of Positive. It identifies Anthony Cirrincione as the sole owner
and officer of Service. The specification does not name the owners or
officers of Maintenance. However, for Maintenance, the Region served
“Brian Corsette” with the specification and notice of hearing.
to benefit funds, and notifies the Respondents that they
should file timely answers complying with the Board’s
Rules and Regulations.
On May 18, Anthony and Sandra Cirrincione submit-
ted a letter to the Region. In their letter, the Cirrinciones
state that they no longer own or can represent Positive or
Service and that both entities are “in the hands of the
bankruptcy court.” The letter advises the Region to con-
tact the owner of Maintenance because the Cirrinciones
have “nothing to do with them [sic].” Finally, the Cirrin-
ciones represent that they are without financial resources
to retain counsel. The Cirrinciones have not sworn to
this letter or a served a copy of it on the other parties.
On May 20, Brian Corset submitted a letter to the Re-
gion, purporting to be the sole owner of Maintenance.
The letter asserts that Maintenance’s only relationship
with Positive was that Corset “bought the work van and
took care of some of there [sic] customers, that’s it.”
Corset also asserts that Maintenance “has a lot of debt,
no assets and a very dim future.” He represents that he
cannot afford an attorney and inquires if the Board can
provide him with one. Corset has not sworn to this letter
or a served a copy of it on the other parties.
By letter dated May 22, the Region informed both the
Cirrinciones and Corset that, pursuant to Rule 102.56 of
the Board’s Rules and Regulations, no answers to the
compliance specification had been received and that,
unless an answer was filed by May 28, a motion for de-
fault judgment would be filed. In a May 23 letter to the
Cirrinciones, the Region acknowledged receipt of their
May 18 letter, asserted that the only debtors in the bank-
ruptcy case were the Cirrinciones, as individuals, and
advised that their bankruptcy status did not relieve Posi-
tive of the responsibility for filing an answer. By letter
dated May 23, the Region acknowledged receipt of Cor-
set’s May 20 letter, advised Corset that the Board could
not provide him with counsel, and stated that his pro se
status did not relieve him from the obligation to file an
answer. These May 23 letters restate the Region’s intent
to seek default judgment if the Respondents do not file
an answer by May 28, but do not address why the Re-
spondents’ letters were deficient or cite any specific pro-
cedural requirements.5
On June 9, the General Counsel filed with the Board a
Motion to Transfer Proceedings to the Board and for

5 According to the General Counsel’s uncontroverted motion, Sandra
Cirrincione telephoned the Region on May 28. During this call, Cirrin-
cione reported that she and her husband considered their May 18 letter
to be an answer. The Region advised Cirrincione that the May 18 letter
did not meet the requirements of Sec. 102.56 and it intended to file a
motion for default judgment. The General Counsel does not assert that
the Region specifically explained why the May 18 letter was deficient.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD284
Default Judgment, with exhibits attached. The General
Counsel argues that the Respondents’ letters are not le-
gally sufficient answers under Section 102.56(a) because
they are not sworn to and have not been served on the
other parties.6 Further, the General Counsel asserts that
the Respondents’ letters are not legally sufficient under
Section 102.56(b) because they fail to specifically admit,
deny, or explain any allegation in the compliance specifi-
cation. Absent a legally sufficient answer, the General
Counsel urges the Board to grant default judgment.7
On June 18, the Board issued an Order Transferring
the Proceeding to the Board and a Notice to Show Cause
why the motion should not be granted. Positive, Service,
and Maintenance did not respond to the Notice to Show
Cause. Accordingly, the allegations in the motion are
undisputed.
Ruling on the Motion8
Section 102.56(a) of the Board’s Rules and Regula-
tions provides that a respondent shall file an answer
within 21 days from service of a compliance specifica-
tion. The answer must be served on the other parties and
in writing, the original being sworn to by the respondent
or by a duly authorized agent. Section 102.56(b) re-
quires that an answer shall specifically admit, deny, or
explain each and every allegation of the specification.
Finally, Section 102.56(c) provides that if a respondent
fails to timely file any answer to the specification or suf-
ficiently deny any allegation as required by 102.56(b),
the Board may, either with or without taking evidence in
support of the allegation of the specification and without
further notice to the respondent, find the specification to
be true and enter such order as may be appropriate.
When applying Section 102.56, “the Board has shown
some leniency toward respondents who proceed without
benefit of counsel.” Nick & Bob, 345 NLRB at 1093

6 The General Counsel does not argue that the Respondents failed to
timely submit their letters.
7 We shall treat those portions of the General Counsel’s motion
which argue that the Respondents’ letters are not legally sufficient
answers under Sec. 102.56(a) as a motion for default judgment. Al-
though not titled as such, we shall treat those portions of the General
Counsel’s motion which argue that the Respondents’ letters are not
legally sufficient under Sec. 102.56(b) as a motion for summary judg-
ment. “Summary judgment is appropriate when a respondent does not
raise a genuine issue of material fact.” Nick & Bob Partners, 345
NLRB 1092, 1093 (2005).
8 Effective midnight December 28, 2007, Members Liebman,
Schaumber, Kirsanow, and Walsh delegated to Members Liebman,
Schaumber, and Kirsanow, as a three-member group, all of the Board’s
powers in anticipation of the expiration of the terms of Members Kir-
sanow and Walsh on December 31, 2007. Pursuant to this delegation,
Chairman Schaumber and Member Liebman constitute a quorum of the
three-member group. As a quorum, they have the authority to issue
decisions and orders in unfair labor practice and representation cases.
See Sec. 3(b) of the Act.
(quoting Convergence Communications, 342 NLRB 918,
919 (2004)). Under certain circumstances, the Board has
accepted a pro se respondent’s unsworn answer to a
compliance specification. See, e.g., Workroom for De-
signers, 289 NLRB 1437, 1438 (1988).9 Moreover, the
“Board generally will not reject an improperly served
document absent a showing of prejudice to a party.”
Paolicelli, 335 NLRB 881, 882 (2001) (quoting Century
Parking, 327 NLRB 21, 21 fn. 7 (1998)). Here, neither
the General Counsel nor the Union has claimed any
prejudice. In fact, no claim has even been made that the
Union is unaware of the Respondents’ letters. See
Paolicelli, 335 NLRB at 882. “While the Board strongly
encourages strict compliance with its procedural rules,
including those concerning the manner of filing and serv-
ing answers to complaints, the Board recognizes that the
law favors a determination on the merits.” Id. There-
fore, under the particular circumstances here, we decline
to grant the General Counsel’s motion for default judg-
ment based on the pro se Respondents’ failure to have
their letters sworn to or served on the other parties.
We disagree with the General Counsel’s contention
that the Respondents have failed to sufficiently deny all
of the specification allegations. As described above, the
Cirrinciones assert that Maintenance is not affiliated with
Positive and Service. Moreover, Corset claims sole
ownership of Maintenance and reports a minimal rela-
tionship with Positive. We find that these responses con-
stitute general denials of the specification’s assertion that
Maintenance is an alter ego of Positive. To this end, the
Board has found that a general denial of alter ego status
is sufficient to warrant a hearing. Pallazola Electric, 312
NLRB 569, 571 fn. 6 (1993) (citing Best Roofing Co.,
304 NLRB 727, 728 (1991)). Consequently, we shall
order a hearing on this issue.

9 We note that the Region did not inform the Respondents of the de-
ficiencies in their letters before filing its motion. The Board’s Case-
handling Manual states that before filing a motion with the Board, the
General Counsel should advise a respondent in writing that its answer
is deficient. NLRB Casehandling Manual (Part Three) Compliance
Proceedings Sec. 10652.2. “While compliance with that requirement is
the better practice, it is not a legal mandate.” Nick & Bob, 345 NLRB
at 1093 fn. 5. The Board has also stated that “[n]either the Board’s
Rules and Regulations nor our decisions require the Region to grant a
respondent an opportunity to amend a defective answer before the
General Counsel files for summary judgment.” Aquatech, Inc., 306
NLRB 975, 975 fn. 6 (1991). Chairman Schaumber acknowledges the
foregoing as extant precedent and applies it institutionally, noting that
we are denying default judgment in this case. However, in his view,
compliance with the Casehandling Manual’s notice of deficiency re-
quirements should be mandatory at the very least where pro se litigants
are involved. See, e.g., Nick & Bob, 345 NLRB at 1094 (Member
Schaumber concurring).
POSITIVE ELECTRIC ENTERPRISES 285
The Respondents’ letters do not, however, deny any of
the remaining specification allegations.10 Therefore, in
the absence of good cause for the Respondents’ failure to
raise any genuine issues of material fact concerning the
remaining specification allegations, we grant the General
Counsel’s motion and deem those allegations to be ad-
mitted as true as against Respondents Positive and Ser-
vice. Accordingly, we conclude that the amounts of
backpay due the unit employees are as stated in the com-
pliance specification, and we will order Respondents
Positive and Service to pay those amounts, plus interest
accrued to the date of payment, subject to the appropriate
credit for payments already made. In addition, we con-
clude that the benefit fund payments owed are as stated
in the compliance specification, and we will order Re-
spondents Positive and Service to pay those amounts to
the funds on behalf of the unit employees, plus interest
accrued to the date of payment.
ORDER
IT IS ORDERED that the General Counsel’s Motion for
Default Judgment is denied insofar as it argues that the
Respondents failed to file legally sufficient answers.
IT IS FURTHER ORDERED that the General Counsel’s
Motion for Default Judgment is granted in all other re-
spects, except as to the liability of CNY Electrical Main-
tenance Corp.
IT IS FURTHER ORDERED that this proceeding is re-
manded to the Regional Director for Region 3 for the
purpose of arranging a hearing before an administrative
law judge for the purpose of taking evidence concerning
the allegation that CNY Electrical Maintenance Corp. is
an alter ego of Positive and thus, jointly and severally
liable for remedying Positive’s unfair labor practices,
including the payment of backpay, interest, and other
relief required by the Board’s Order. The judge shall
prepare and serve on the parties a decision containing
findings of fact, conclusions of law, and recommenda-
tions based on all the record evidence. Following service
of the judge’s decision on the parties, the provisions of
Section 102.46 of the Board’s Rules and Regulations
shall apply.

10 The Respondents’ financial circumstances do not warrant denying
the General Counsel’s motion because “the issue in a compliance pro-
ceeding is the amount due and not whether a respondent is able to pay.”
Corbin, Ltd., 344 NLRB 382, 382–383 (2005) (citations omitted).
Additionally, we note that the Cirrinciones do not deny the liability of
Positive and Service, but instead assert that pending bankruptcy pro-
ceedings preclude them from filing answers on behalf of those entities.
However, “it is well established that the institution of bankruptcy pro-
ceedings does not deprive the Board of jurisdiction or authority to
entertain and process an unfair labor practice case to its final disposi-
tion.” Id. at 383 (citing Cardinal Services, 295 NLRB 933, 933 fn. 2
(1989)).
IT IS FURTHER ORDERED that Respondents Positive
Electrical Enterprises, Inc., Mattydale, New York, and
CNY Electrical Service Group, Inc. d/b/a Positive Elec-
tric, Whitesboro, New York, their officers, agents, suc-
cessors, and assigns, shall make whole the individuals
named below by paying them the amount following their
names, plus interest accrued to the date of payment, as
prescribed in New Horizons for the Retarded, 283 NLRB
1173 (1987), minus tax withholdings required by Federal
and State laws, subject to the appropriate credit for pay-
ments already made. Respondents Positive Electrical
Enterprises, Inc. and CNY Electrical Service Group, Inc.
d/b/a Positive Electric shall also make whole those indi-
viduals for payments due the benefit funds by paying the
amounts set forth, plus interest accrued to the date of
payment, as prescribed in Merryweather Optical Co.,
240 NLRB 1213, 1216 fn. 7 (1979). In summary, the
amounts owed by Positive Electrical Enterprises, Inc.
and CNY Electrical Service Group, Inc. d/b/a Positive
Electric are as follows:
BACKPAY:
DISCRIMINATEE NET BACKPAY
Alexander, Charles $ 1,882
Carpenter, Allen 23,666
Corsett, Brian 33,599
Craner, Norman 8,058
Gaiser, David 4,720
Garcia, Reynaldo 3,617
Gonzalez, Abel 3,449
Hart, Kenneth11 20,279
Ivanchuk, Lilia 270
Jones, Clinton 897
Jones, Mark 7,641
Martes, Jesus 2,460
Morey, Douglas 87
Printup, Leonard 1,690
Quigg, David 3,312
Robinson, Gene 3,080
Scherz, James 648
Tavarez, Irving 8,818
Wilcox, Matthew 234
TOTAL BACKPAY: $ 128,407
BENEFIT FUND PAYMENTS:
Health $ 83,373
Pension 30,458
Annuity 4,976

11 The compliance specification, as set forth in the underlying exhib-
its, incorrectly lists the total backpay award for Kenneth Hart as
$20,280. The backpay Order reflects the correct total.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD286
JATC 40,447
NEBF 10,034
TOTAL BENEFIT PAYMENTS:12 169,288

12 The compliance specification incorrectly lists the total amount
owed to benefit funds as $169,286. The backpay Order reflects the
correct total. The sums owed to benefit funds reflect the amounts
stated for periods August 20, 2002 to December 31, 2005, and October
27, 2006, to May 31, 2007, rather than as set forth in the “Summary of
Amount Owing to the Union Funds.”
COMBINED TOTAL DUE:13 $ 297,695
CREDIT FOR PAYMENTS MADE: [11,000]
FINAL TOTAL DUE: $ 286,695

13 The compliance specification incorrectly lists the combined total
due, before the appropriate credit for payments already made, as
$297,693. The backpay Order reflects the correct total.